Kenya's tea industry earned the country 1.45 billion US dollars in 2012, a 4 percent increase from 1.39 billion dollars in the previous year, the industry regulator said on Monday.
Tea Board of Kenya (TBK) Managing Director Sicily Kariuki told journalists in Nairobi that the record earnings were attributable to improved auction prices.
"Despite lower production, Kenya's tea industry managed to earn 1.45 billion dollars in 2012," Kariuki said.
According to tea regulator, Kenya recorded a 2 percent drop in production as output stood at 369 million kg compared to 377.9 million kg in 2011.
"The slight decline in production was caused by adverse weather conditions experienced in certain periods of the year, including severe dry weather conditions as well as the delayed onset of the long rainfall season," she said.
Kariuki said that Kenya's output has been on a decline since the 2010 when the country posted 399 million kg. In addition, she said, that over 3,000 hectares of land under tea cultivation out of the country's 180,000 hectares were attacked by frosts in the month of January in some parts of the country.
Kariuki noted that lower production was also witnessed by a majority of other tea producing countries including Malawi, Sri Lanka, India and Indonesia.
"However, global demand and supply for black tea is almost at equilibrium as both are rising at three annually," Kariuki said.
TBK said that Kenya tea export markets jumped to 56 destinations world wide compared with 53 in 2011 as a result of new sales in Cameroon, Togo and Angola.
Kariuki noted that Kenya's tea export volume including re- exports reached 430 million kg, a 2 percent increase from the 421 million kg recorded in 2011.
"The industry earned 1.28 billion dollars from exports compared to 1.24 billion dollars recorded in 2011," she said.
Data from the TBK also indicated that Pakistan was the leading export destination having imported 90.3 million kg which is equivalent to 21 percent of the total export volume.
"Other notable export markets included Egypt which imported 88. 8 million kg, Britain accounted for 59.3 million kg, Afghanistan imported 41.8 million kg while Sudan purchased 24.8 million kg," Kariuki said.
Kariuki said that while the British market experienced lower consumption as a result of changing preferences among the youthful generation, Sudan's lower export volume was due to continued shortage of foreign exchange attributable to reduction in oil revenues following the South Sudan secession.
The TBK official said that the country experienced expanding exports from emerging markets due a change in preferences from orthodox to black tea, which Kenya produces.
She said Turkey led the key emerging markets in export growth by recording a 135 percent rise from 2011.
"Other promising markets included Chile which grew by 114 percent, Netherlands by 61 percent, Djibouti by 45 percent, Somalia by 37 percent, USA by 33 percent while Indonesia and Ireland each expanded by 28 percent and 18 percent respectively," she said.
TBK said that over the past five years local tea consumption has been growing an average rate of three per annum.
"Local tea consumption for 2012 stood at 22.7 million kg which is 13.6 percent higher compared to 20 million recorded in the previous year," she said.
As a result, the industry earned 170 million dollars domestically, up from 149 million dollars in 2011.
The managing director said that Kenya has experienced sufficient and well distributed rainfall coupled with moderate temperatures towards the last quarter of 2012.
"Consequently, our projections is that production for the first quarter of 2013 is expected to be slightly higher that for the same period in 2012," she said.
She said output for 2013 is expected to hit 373 million kg, 1 percent more than last year's.
TBK is therefore targeting an export earnings of 1.32 billion dollars, a four percent increase from 1.27 billion dollars in 2012.
Domestically, the tea regulator is projecting 192 million dollars in revenue up from 170 million dollars in 2012.
According to Kariuki, Kenya's tea prices are expected to remain steady at 3.20 dollar per kilo due to sustained demand arising from rapid urbanization worldwide coupled with increasing disposal incomes.
She noted that the government is currently in the process of carrying out research on other uses of tea beyond consumption as a beverage.
"Tea has numerous by-products that can be used in the medicinal, cosmetic and detergent industries while its seeds have a similar amount of oil as olives," she said.